The Six Secrets of Change

Instead, the author believes the key to thriving through change is much more subtle than this and involves a combination of flexible approaches. This book will help you discover and apply that combination to your business, your organization, your cause, or your life.

The author compiles his theories into six secrets. These secrets, he notes, aren't secret in the usual sense of the word – they're not unknown or hidden. In fact, the six secrets may sound quite familiar if you've read anything about business or change management. He calls them secret because they're difficult to grasp at a deep level, to combine successfully and to act on decisively.

If you do learn to master them, though, you'll have fresh tools and more confidence to respond to change and flourish amid uncertainty.

So who's this book for? As the subtitle suggests, it's primarily aimed at leaders whose job it is to manage change, no matter what field or industry they're in. You could work in the corporate world, in education, medicine, politics, government or a non-profit organization – these secrets travel well between all sectors.

But you don't have to be in a management position to benefit from this book. There are some good lessons in it for people at all levels of a business or other organization.

We should note at this point that this book isn't for everyone. The author's approach is quite theoretical, so if you're looking for a practical, how-to manual, "The Six Secrets of Change" isn't for you.

Also, the author has an educational background rather than a business one. So, while he successfully applies what he's learned in education reform to the corporate world, many of his conclusions on business are drawn from the works of other authors. He's done extensive research, but he's done it at the library, rather than on the shop floor.

If you're more comfortable taking your business tips from someone with first-hand corporate experience, this many not be the book for you.

But on the plus side, "The Six Secrets of Change" provides a comprehensive study of some of the best-selling business books of recent times. The author examines the ideas of such luminaries as Jack Welch, former CEO of General Electric, and management guru Henry Mintzberg, as well as some classic theories dating back almost a century. Where he sees holes in existing literature, he exposes them, and where he finds reliable concepts, he expands on them from his own work in education and from other studies, drawing some valuable conclusions.

The author has a vast amount of experience in managing change and in helping others do the same. He is professor emeritus of the Ontario Institute for Studies in Education at the University of Toronto and has worked extensively in education reform in England and Canada, both in the public school system and universities. He advises and consults change projects internationally and has authored two books prior to this one: "Change Leader" and "Leading in a Culture of Change."

So keep listening to learn why you need to love your employees, how to build capacity effectively, and why success comes down to systems, rather than individuals.

In keeping with the book's theoretical approach, "The Six Secrets of Change" begins by asking what makes a good theory. Good theories, the author says, travel well – from big business to government and non-profit, and across national boundaries and cultures.

They're also grounded in action. Theories taught in abstract, for example within the safe bubble of classroom-based MBA programs, may not make the grade out there in the real world.

And before he presents his own ideas on managing change, the author sounds a note of caution. He warns readers not to take any theory as an absolute truth or a silver bullet – including his own. Leaders often stumble when they believe they're right and refuse to adapt or drop a well-worn theory or strategy, especially in uncertain times.

He also warns of the dangers of generalizing about what makes a successful business by looking at top-performing companies, as Jim Collins did in Good to Great. The secrets to success, he argues, are much more complex than some authors make out.

So let's now look at a few of the author's secrets more closely, beginning with his first concept: Love Your Employees.

In a competitive environment, it's not surprising companies are results-driven. But an obsessive focus on the bottom line, while perhaps yielding fruit in the short-term, doesn't always lead to sustainable success. Employee satisfaction is key to consistent, long-term performance, but managers can lose sight of the wellbeing of their staff when they're too focused on earnings.

Companies that follow Secret One know how to build a culture that ensures employee satisfaction while at the same time inspiring staff members to see beyond their paycheck – to feel a sense of belonging and purpose. The sense of commitment, pride, and purpose felt by employees then overflows to customers and other stakeholders and, ultimately, to the balance sheet.

The author finds evidence for his first secret in the 2007 book "Firms of Endearment: How World Class Companies Profit from Passion and Purpose," by Rajendra Sisodia, David Wolfe, and Jagdish Sheth.

The companies named in this book include Amazon, eBay, Johnson & Johnson, and Southwest Airlines. These companies treat all their stakeholders with equal importance: customers, employees, investors, partners, and society at large. Often these companies pay their employees higher wages than competitors, helping to boost employee satisfaction, but interestingly, they have lower labor costs overall. That's because they have less turnover and greater productivity.

When compared to the companies profiled by Collins in "Good to Great," those highlighted in "Firms of Endearment" performed far better financially.

The author cites the example of Robert Nardelli, a former senior executive at General Electric, to support his theory on the importance of loving your employees.

Nardelli lost out to Jeff Immelt to replace Jack Welch at the helm of GE, and was immediately appointed CEO of Home Depot. He took GE's command-and-control management approach with him.

Nardelli overhauled Home Depot's structure, centralizing supply orders, streamlining operations and cutting costs. He slashed full-time jobs, replacing them with part-time positions, and brought in former military officers to run stores that had previously been known for their customer-friendly, folksy atmosphere.

The company's revenue almost doubled between 2000 and 2005, an impressive financial performance. But Nardelli alienated employees, customers and shareholders with his blunt, results-driven approach and arrogant style.

Consumer satisfaction plummeted while the company's share price stagnated. Nevertheless, Nardelli awarded himself a big pay package, angering investors.

He resigned abruptly in 2007 and left with a severance package of two hundred and ten million dollars, despite failing to increase value for shareholders and leaving behind a sense of dissatisfaction among customers and employees.

The case of Nardelli is a good example of how a top-down, military-style management approach can run into problems.

Keeping your employees happy may sound like common-sense advice – and it would be hard to find a company that doesn't at least pay lip service to this idea. But the author argues companies that consistently perform well over time take this concept to heart. By analyzing the vast amount of business and management literature available on this topic, he shows readers what works and what doesn't.

Let's now look at another secret: Capacity Building Prevails. In this chapter, the author discusses the importance of treating employees with respect and encouraging them, rather than judging them.

Now, it's clear this secret overlaps with the first, and it's important to note there's substantial overlap between all six secrets. The book can seem repetitive at times but the author frequently points out this overlap is intentional. He never meant the secrets to be applied in isolation. They're like links in a chain and they all relate to each other. The best leader will know how to combine the six concepts into a fully integrated strategy that can be easily adapted to meet the demands of a changing environment.

Companies that know how to build capacity effectively create a climate in which employees are encouraged to take calculated risks and move out of their comfort zone, without fear of recrimination or judgment.

Building capacity begins with attracting talented people and helping them develop, both individually and collectively. This development needs to happen on the job, rather than in a classroom, the author argues. He expands on this point in his discussion of another secret: Learning is the Work. This secret stresses the importance of continual learning to improve performance.

The author names Toyota as a model company for ongoing learning and capacity building. Toyota begins by attracting and employing good people. It carefully screens candidates for their potential to become exceptional employees and it takes particular care in selecting and developing managers and coaches.

Some of the attributes the company looks for include genuine concern for others, patience, persistence, and an inquisitive nature.

The author compares this approach to that of Enron, which used to boast that it hired brilliant people but still ran into catastrophic problems. Individual brilliance, while not to be dismissed, is not enough, unless accompanied by additional qualities such as humility, a willingness to learn, and a team spirit.

Returning to his background in education to support this theory, the author examines a study by McKinsey & Company, which looks at the world's best-performing school systems in terms of literacy and mathematics. The high-performers included England, Australia, South Korea, and Canada.

The study found that systems in these countries consistently attracted more talented and committed individuals into teaching through a selection process that didn't merely focus on academic talent. They screened people for their literacy and numeracy, but also for their interpersonal and communication skills, their willingness to learn, and their motivation to teach. The candidates had to show they had a real passion for enabling children to learn.

This is one place where the author successfully translates his educational experience into important lessons for the corporate world.

Let's now look at the author's final secret: Systems Learn.

When companies are struggling in challenging times, they can fall into the trap of thinking there's a single individual who can save them. The CEO is often the first person to go when a company stumbles, to be instantly replaced by a more charismatic, high profile leader who's charged with turning the ship around in an instant. This common reaction to problematic times rarely leads to long-term, sustained success.

The companies that perform well over time are those that create systems that are bigger than any one individual, that will survive beyond the inevitable changes at the top. The best organizations have a number of leaders making the big decisions together. Decisiveness in upper management is important, but a more collegiate approach will ensure continuity.

The author again points to Toyota as an example of a company with this type of leadership culture present at all levels – or at least at the time of writing. Authors who examined Toyota's business model closely found changes in leadership had no impact on the company's performance, since good management practices were embedded throughout its structure.

We don't have time to discuss the remaining two secrets, but they involve connecting peers and employees with the organization's overall purpose and acting with absolute transparency around data and communication.

There's a lot of great material in this book but it's important to stress it's not all original. The author brings valuable experience and perspective from the field of education reform and transfers this well to the business sector, but he relies on other writers for most of the insights into the corporate world, as you heard earlier.

But given how widely he has read on this subject, this is not necessarily a bad thing. His bibliography is vast and his analysis of the literature results in some excellent advice for readers on the best approaches to take in challenging and uncertain times.

"The Six Secrets of Change" by Michael Fullan is published by Jossey-Bass.

That's the end of this episode of Book Insights. Thanks for listening.